The Law the Planner

Updating Important Clauses

Don't go into negotiations with stale wording

take note

• Force majeure clauses cover disruptions in the moment, as the meeting is about to begin, not things that happen a year out.

• The planner and the hotel should agree to make adjustments to the room block, comp rooms and so forth at agreed-upon dates leading up to the meeting.

• Take time now to review your cancellation or business-interruption insurance to make sure it covers all the bases.

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In creating the complex agreement between hotels and meeting hosts, it is important for both parties to make sure that they are working on a level playing field, crafting clearly understandable conditions that are mutually beneficial.

M&C and I have put together the Planners' Guide to Smart Hotel Contracts to help you update five main clauses -- force majeure, cancellation, liability, relocation (walking attendees) and construction/renovations -- with sample wording for each. Following is a preview of what you'll find in this free guide.

FORCE MAJEURE
This is one of the most misunderstood contract terms, though it is an everyday clause. Most often, it is thought of narrowly as covering "acts of God," where a meeting is canceled because of a weather event such as a hurricane or earthquake.

But even if, say, your speaker, who is the main draw of the program, becomes unavailable and causes a significant number of attendees to drop their plans, that can be covered by force majeure, if it is contractually defined as including such a "failure to perform." For greater clarity, be sure to spell out possible situations such as civil unrest, suddenly unavailable speakers, etc. (You'll add to this list over time, as experience accrues.)

CANCELLATION
Both attrition and cancellation clauses effectively act as security blankets. Attrition compensates the hotel should the room pickup fall short. Cancellation pays the hotel or the host if the other has to pull out of the deal.

These two clauses should mesh, and they both should have a resell clause, requiring that the hotel credit your group for rooms filled with new business.

The wording here is of paramount importance. Watch out for hotels pushing to specify that new room sales you are counting on will not be considered resales to be applied to the room block unless the property has filled all other available space.

LIABILITY
One purpose of a contract is to assign responsibilities to the parties involved. Essentially, this means making a list of actions that should (or could) take place, and putting in writing who will handle each. Related is the indemnification clause, stating that if I get sued for something that you did or did not do, you will "indemnify" me against any cost or loss I incur. If a problem occurs and you don't have this clause, disputes as to who is responsible could arise -- and then the insurance companies will fight it out.

Beware, here, of wording that says if an attendee or company sponsors a hospitality suite under the aegis of the host organization, the host is obligated to meet the cost of that suite and any liability, such as liquor liability, that might arise. Don't accept that clause.

Jonathan T. Howe, Esq., is a senior partner of the Chicago and Washington, D.C., law firm of Howe & Hutton Ltd., specializing in meetings and hospitality law. Email questions to him at [email protected]

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